Borrowers may be able to access emergency cash with bad credit via funding options like bad credit loans, payday loans, secured loans, or even credit cards!
Are you looking for emergency cash with bad credit? Unfortunately, borrowers with poor credit may have a difficult time finding approval for traditional types of financing, such as bank loans. But that does not mean there are no viable options available!
If you have less-than-perfect credit and are looking for cash, you may be able to get the funding you need with a bad credit emergency loan.
Here you will learn all about online lenders for bad credit, emergency loans, how they work, how you can qualify, and what your other options are.
What Is An Emergency Loan?
An emergency loan is exactly what it sounds like, it’s a loan that is made to help borrowers who need money fast for a short-term emergency. Generally, people take out emergency loans for things like unexpected car repairs, medical bills, home repairs, a rent or mortgage payment if an unexpected expense comes up and you are unable to make that essential payment. Not too surprisingly, emergency loans are meant to be fast and easily accessible for borrowers, so borrowers with bad credit may be more inclined to borrow from these loan options.
Where Can I Get An Emergency Loan With Bad Credit?
If you’ve never searched for an emergency loan, it may be a little daunting to know where to start. The good news is that there are all kinds of lenders that you can get an emergency loan with, many of which you have probably already conducted business with. Here are some lending options for emergency loans:
- Online Lenders — Online lenders are likely the first option that you’ll come across when searching for emergency loan options, especially if you have poor credit. CreditNinja is an example of this kind of lender. Online lenders may offer more flexibility and speed than more traditional institutions (like banks or credit unions) which can be crucial during an emergency.
- Banks — Banks usually offer a wide range of lending options, including emergency loans, however, you will likely need to have at least a fair credit score to be considered.
- Credit Unions — Most credit unions usually offer some kind of emergency loan option even for bad credit borrowers, however, you may have to be a part of that credit union, which can be limiting.
How To Get An Emergency Loan With Bad Credit
Just like any other loan option, there are a few steps apart of getting an emergency loan with bad credit. Here is what the typical process will look like:
- Get Pre-qualified — Prequalification allows a lender to filter applicants based on the minimum requirements that they have. For example, some lenders may have a minimum income requirement for borrowers. This can help both parties save time.
- Submit an Application — After prequalification, you can move forward with a more detailed application which will let you know about final approval. Here you’ll submit information about yourself, your income, and other financial information.
- Review and Accept Loan Terms — If approved for a loan, you’ll get the loan terms, which you can review. Pay close attention to the loan amount, interest rate, repayment terms, APR, length of your loan, your monthly payment, and other important loan details so you can make an informed decision. If the loan fits your needs, you can accept the terms and conditions by signing.
- Get Funded — Once you sign and submit your loan documents, you will receive the emergency funds you need. How you receive your funds will depend on the lender.
- Loan Repayment — Lastly you’ll have to repay your loan. Repayment terms will depend on your emergency loan type and lender. For example, if you took out a payday loan, then you will likely have to repay the full amount in about two weeks, while with a personal loan, repayment will usually begin 30 days after funding, with the repayment split up into several payments.
Eligibility Requirements for Emergency Cash Advance Bad Credit
Before you dive into an application for emergency loans, make sure you meet the basic eligibility requirements. Fortunately, qualifying for many emergency loans is easy. So, you may be able to find quick approval even if you have bad credit or no credit history at all!
Age Requirements
In order to receive loan approval for just about any financial product, borrowers must be at least 18 years of age or older. At 18, U.S. citizens are considered legal adults who are able to make their own financial decisions, which include applying for loans and other lines of credit.
Income
Lenders for any type of loan, including an emergency loan, need to make sure their borrowers have sufficient means to pay back their balance. Lenders will ask for proof of income to confirm borrowers aren’t signing up for an emergency loan they cannot afford. Borrowers can prove their income for loan approval via documents such as:
- Paystubs.
- Tax documents.
- Bank statements.
- Self-employment ledger documentation.
- Social security benefits letters.
- Unemployment benefits letter.
During the application process, talk with your loan agent to see what kinds of documents they accept as appropriate proof of income.
Bank Account
Not every emergency loan option requires that borrowers have a bank account, but many do. Giving emergency loan lenders access to your bank account information during the approval process allows them to directly deposit your approved funds into your checking account ASAP. Direct deposit is by far the fastest and most efficient way to receive your approved emergency loan funds.
Military Restrictions
Most reputable lenders have a rule not to extend emergency loan funds to active military members. However, there are many benefits veterans can take advantage of when they need financial assistance.
Residency
Emergency loans also typically require that borrowers be a resident of the United States. Laws and regulations regarding financial products and assistance can vary depending on where you are. So, to ensure you are being paired with the appropriate emergency loan product, interest rate, payback terms, etc., lenders need to confirm every borrower’s place of residency.
Additional Fees
Along with interest rate charges, there may also be other fees associated with emergency loans. For example, you may have to agree to pay an origination fee when you sign your loan contract. Origination fees are extra charges some lenders require for processing a borrower’s emergency loan application and contract. Before you submit your emergency loan application, make sure there is enough room in your budget to cover these potential extra charges.
How to Choose An Emergency Loan with Bad Credit: A Quick Breakdown
| Feature | Description | Consideration for Bad Credit |
| Loan Term Lengths | Duration over which the loan is repaid. | Shorter terms may have higher payments but less interest overall. Longer terms ease payment amounts but increase total interest. |
| Repayment Flexibility | Options for repayment frequency and adjustments. | Look for lenders offering flexible repayment plans, especially if income is irregular. |
| Pre-Approval Process | Process to check eligibility without impacting credit score. | Opt for lenders offering a soft credit check for pre-approval to avoid harming your credit score further. |
| Late Payment Policies | Fees and penalties for late payments. | Understand the penalties for late payments, as they can significantly increase the cost of the loan. |
| Loan Use Restrictions | Limitations on how loan funds can be used. | Some loans, especially specific emergency loans, might have restrictions on the use of funds. |
| Credit Building Opportunities | Potential for the loan to help improve credit score. | Choose loans that report to credit bureaus to help rebuild your credit over time. |
| Customer Support and Financial Education | Availability of support and resources for borrowers. | Access to customer support and financial education can be crucial for managing loans effectively and improving financial health. |
| Early Repayment Options | Flexibility to pay off the loan early without penalties. | Early repayment can save on interest, so check if lenders allow you to pay off early without extra fees. |
| Loan Increase Possibility | Option to increase the loan amount after initial approval, based on repayment history and creditworthiness. | Some lenders may offer the option to increase the loan amount, which can be beneficial in prolonged financial hardships. |
| Insurance or Protection Plans | Options for loan protection in case of unforeseen circumstances affecting repayment ability. | Consider if loan protection plans are offered and whether they are cost-effective for your situation. |
What Can I Use an Emergency Personal Loan For?
Emergency loans can be used to pay for expenses such as:
- Rent and mortgage payments
- Unexpected expenses
- Financial emergencies
- Medical bills
- Home repair
- Car repair (such as a car accident cash advance)
- More!
Types of Emergency Loans & Alternatives For Bad Credit Borrowers
There are many types of emergency loans bad credit borrowers may be able to take advantage of. Below is more information on some of the best emergency loans available to borrowers with either high or low credit scores.
Unsecured Personal Loans
An unsecured personal loan is a type of financing that doesn’t require borrowers to put up collateral of any kind. Furthermore, personal loan lenders are also known for offering competitive interest rates to borrowers with a wide variety of credit scores. According to Money.com, the average unsecured personal loan debt per borrower is approximately $11,000.1
With a personal installment loan, you will pay back your balance in fixed monthly installments, making payments easy and manageable to plan for. Furthermore, interest rates on personal installment loans are traditionally also fixed, which means you won’t have to worry about your interest charges going up from month to month.
Cash Advance Loans
Many financial mobile applications allow users to access their paycheck funds before their payday. Some of the top apps that may help you get an emergency cash advance are:
- Earnin
- Dave
- Brigit
- Empower
- Chime
- MoneyLion
Government Assistance Loans
If you are going through a dire financial crisis, you may also consider seeking help from the federal government. The U.S. Government has emergency hardship financial aid programs in place to help citizens pay for bills like:
- A home energy bill
- Medical costs
- Telephone services
- Prescription drug costs
Emergency Payday Loans for Bad Credit
If you need a small amount of money, you can reasonably pay it back in two weeks or less; you may consider an emergency payday loan. Payday loans are a form of short-term financing that comes with low loan amounts and high-interest rates. Since loan amounts for payday loans are so low, payday lenders usually expect borrowers to pay back their balances in full in approximately fourteen days or less. Unless you can keep up with the brief payback schedule, you may want to stay away from payday loans.
Credit Card Cash Advance
Credit card cash advances are a way you may be able to get instant cash without having to fill out an application. With credit card cash advances, borrowers take out cash using their credit limit. However, remember that interest rates on cash advances with a credit card usually are higher than regular credit card transactions and purchases.
Title Loans
Title loans are a type of secured loan that uses the borrower’s vehicle as collateral. According to Pew Charitable Trusts, there are over 2 million Americans who have a car title loan.2 Similar to payday loans, title loans also usually come with very low loan amounts and extremely high-interest rates. One advantage of title loans is that borrowers can usually keep their vehicle to drive like normal while they pay back their loan.
Can I Lose My Car With a Title Loan?
Unfortunately, yes. Should a borrower miss a certain amount of payments or default on their loan, they risk losing access to their vehicle. If a borrower’s car is repossessed from a title loan, it will be taken to a secure impound lot, where it will be kept until the borrower can become current on their loan balance.
Home Equity Line of Credit
Some homeowners may be able to use the equity in their property in order to get approval for a home equity line of credit. Being a secured loan, home equity loans use the borrower’s home/property as collateral.
Maximum Amounts for Home Equity Lines of Credit
The maximum loan amount for home equity lines of credit can be higher since the equity in most people’s homes can be tens of thousands of dollars or more.
However, keep in mind that just like any other secured loan, borrowers may lose their collateral should they happen to default on their loan. Since the stakes for home equity loans can be quite high, they are not a good short-term emergency loan solution.
What To Consider Before Applying for an Emergency Loan
Getting any type of loan, including emergency loans, is an important financial decision. To set yourself up for success, think about the core elements of your loan before you apply; that way, you are less likely to run into any surprises.
Elements of your emergency loan you should consider before applying are:
- Preferred loan amount
- Financial product/loan type
- Interest rates
- Credit score/credit report
- Current debt situation
- A payback plan
- Your other financial options
Desired Loan Amount
Think about why you are seeking out an emergency loan in the first place. Are you looking for a few hundred dollars to catch up on a few past-due bills, or are you looking for a larger amount to cover a more significant financial emergency? Once you have narrowed down exactly what you want to pay for with your loan, you can more easily decide how much you need.
Qualifying Interest Rates
Your interest rate is perhaps the most impactful factor of your loan. The higher your interest rate, the more you will have to pay over the course of your loan. Some emergency loans, like emergency loans from a bank, will almost always come with higher interest rates for low-credit borrowers. If you are looking for emergency cash with bad credit, you may be able to get a better deal on interest rates by going with another type of financial product.
Most Recent Credit Score
To further narrow down which type of loan product is best for you, take a look at your most recent credit report and credit score. If your credit is extremely low, you may want to wait until you can boost your score a bit before applying for a loan. Some ways you can work towards improving a bad credit score are:
- Paying your bills and expenses on time.
- Decreasing the amount of hard credit inquiries you accumulate.
- Avoid acquiring forms of “bad debt.”
Current Debt
It is also important to consider your current debt payment obligations before you apply for a loan. If you have an excessive amount of debt, you should heavily consider paying some off first before you apply for an additional loan.
Establish a Payback Plan
After you receive approval for your loan, have you thought about how you are going to pay your balance back? To avoid digging yourself into a financial hole of debt, think about how you are going to go about paying back your loan. To take the stress out of remembering to make payments, you may consider signing up for automatic payments. With automatic payments, your monthly loan payment will be taken directly out of your checking account on its designated due date.
Explore Your Other Options First
Before you acquire more debt via emergency loans, consider your other options first. Do you have enough money in your savings account to cover your expenses? Or, is there a close friend or family member you can ask for the money? If you ask a friend or family member for a loan, you most likely won’t have to worry about origination fees or interest payments/charges.
Tips For Improving Bad Credit
Improving your credit score can be extremely helpful when you need to borrow money, as you’ll not only have an easier time qualifying for emergency loans, but you’ll also get to choose the best loan options and lenders. No matter where you are starting from there are things you can do to improve bad credit, here are a few places to start.
- Review your Credit History for Errors and Dispute Them — Mistakes on credit reports can happen and if they are left uncorrected, they can hurt your credit scores. That’s why it’s important to check your credit reports often and go through the correction process if any mistakes or inconsistencies occur (done through a dispute).
- Pay Bills on Time — One of the most important things you can do for your credit is to pay your bills on time. Payment history is the largest factor that impacts your credit scores, and even a single missed payment can impact your credit for up to 7 years.
- Pay off Debt and Credit Card Balances — When your credit utilization ratio (the amount of debt you have compared to your available credit) goes above 35% it can be harmful to your score. Paying off debt like loans and credit cards can help that ratio go down, thus helping your credit score.
- Avoid Hard Inquiries — Hard inquiries occur when a lender pulls your credit reports, while a single inquiry usually only brings down a score by a few points, multiple in a short span of time can hurt your score.
How to Build an Emergency Fund Instead
An emergency fund can be extremely beneficial when financial hiccups happen, rather than taking on debt you can borrow funds from yourself—overall a better move for your finances. If you don’t have an emergency fund just yet, there are several different ways in which you can get started:
- Set a Savings Goal — Setting a specific savings goal with a potential deadline can be motivating and a good way to keep accountability.
- Create a Budget for Spending — The only way you’ll be able to save money is by making sure you allocate funds before they are spent, and this is where a spending budget comes in. By putting restrictions onto your spending, you can ensure that you’ll have enough put away to build your savings fund.
- Automate Savings — This can be a great option if you are someone who forgets to move money around or may not have the best grasp on spending limitations right away. When you automate your savings, you’ll set up a reaction (a certain date, or deposit amount, etc. ) which will trigger automatic allocation of funds into a savings account (you can set the amount). That way you don’t even have to think about whether you are saving, it will be done for you.
- Find a High-yield Savings Account — High yield savings accounts offer more return than a standard savings account, that being said they usually have more limitations than your standard savings options. And so, while they may not be the best fit for everyone’s financial situation, for some they can be helpful with a higher return.
FAQ: Emergency Loan Options
Interest rates for loans for bad credit, including emergency cash loans and unsecured personal loans, can vary widely based on the lender and your credit profile. Generally, these rates are higher than standard loans due to the increased risk to the lender.
The speed of fund disbursement varies by lender. Online lenders often process applications quickly, and in some cases, you can get an emergency loan within 24 hours after approval.
The maximum loan amount varies based on the lender and your financial situation. Generally, loans for bad credit offer smaller amounts, but some lenders might offer more based on your income and other factors.
Before taking a payday loan, consider the high-interest rates and fees, the short repayment period, and the risk of falling into a debt cycle. Explore other options and only use payday loans as a last resort.
This will depend on the lender and the loan type you decide to inquire for. Some lenders may not even check credit scores, while others do check but may be flexible for emergency funding.
Borrowing from payday lenders can impact your credit score differently depending on the lender’s policies. Some payday lenders do not report to credit bureaus unless the loan defaults, while others might report your loan from the outset. It’s important to ask the lender about their reporting policy. Remember, failure to repay a payday loan can negatively affect your credit score.
A Word From CreditNinja on Emergency Cash for People With Bad Credit
CreditNinja knows everybody deserves access to quick and efficient funding when they are going through a financial crisis. If you are looking for an emergency loan, but have less-than-perfect credit, know that there are viable options available to you. For example, convenient personal loans with CreditNinja may be able to help you get your finances back on track with flexible terms, competitive interest rates, and personalized emergency loan amounts. Check out our online application to see how much cash you could get in your bank account today!
References:
- The Personal Loan Industry Is Booming — Here’s Why | Money.com
- A Map From Auto Title Loans: Market Practices and Borrowers’ Experiences | Pew Trusts
- Help with Bills | USAGov
- Website | Earnin
- Website | Dave
- Website | Brigit
- Homepage | Empower
- Homepage | Chime
- Homepage | MoneyLion
